Six Tips to Keep Money from Wrecking Relationships

Disagreements over money are a leading cause of marital and relationship troubles. Many couples neglect to take the time to hash out issues around money and finances that can potentially ruin their relationships.

Here, just in time for Valentine’s Day, are six practical and easy tips to help you establish good communication with your partner, avoid money arguments and build more joy, trust, and mutual satisfaction:

1. Recognize that money is an emotional issue – For many men who are wired to be providers, money brings up issues of self-worth, so they take financial conflict to heart. For many women, money represents security, so problems or disputes can bring anxiety and even fear about survival. Tip: Choose a time when you’re both relaxed and not rushed to start talking about money issues.

2. Talk, talk, and talk some more about your finances together – As in most issues within a relationship, good communication is vital. Tip: Set goals together, and track your progress as you work through the following steps.

3. Agree on how to divide your money – If you’ve been together for years and have stumbled along without a clear understanding and agreement in this area, it’s never too late to start. Tip: Start now. Common topics to cover include individual discretionary spending, household expenses, retirement savings, and extended family responsibilities.

4. Avoid taking on too much debt – Couples who live within their means tend to be the happiest, while those with too much debt tend to fight more often and be more stressed about their money. Tip: Instead of constantly talking about the burden of your debt, talk to each other about your financial goals — where you’d really like to be, and how you’ll get there. Rather than letting debt issues drive you apart, facing your debt as a team can actually strengthen your relationship.

5. Never engage in financial infidelity ­– Financial cheating can be devastating in a relationship. One study found that a full one-third of couples with combined finances had not been completely honest about financial issues. Tip: If you haven’t been fully honest regarding finances, now is the time to clean it up! Begin the conversation with something like, “I know that neither of us is perfect when it comes to money. Our relationship is important to me, so I want to make sure we have a foundation of honesty about our finances.” No matter what comes up, stay calm, avoid judgment, and focus on positive solutions going forward.

6. Understand and acknowledge your different spending habits. People tend to look for a spouse who looks, sounds, and acts as they do — except when it comes to money. It turns out that penny-pinchers tend to marry reckless spenders, and as a result, they report unhappier marriages than couples who have similar spending habits. Tip: Seek to understand rather than correct each other. If something in your partner’s attitude bothers you, tell him how you feel and why. See if you can find compromise, but don’t try to “fix” your partner.

Initially, talking about money with your partner may be uncomfortable. But the rewards of clear, honest financial communication are great. To keep your relationships healthy, it’s critical to discuss these differences and come up with compromises that work for both of you.

About the Author: Pamela Yellen is a financial investigator and the author of two New York Times best-selling books, including her latest, The Bank On Yourself Revolution: Fire Your Banker, Bypass Wall Street, and Take Control of Your Own Financial Future. Her new financial literacy curriculum can be found at www.YourMoneyRevolution.com/about. Learn more at www.BankOnYourself.com

Sidebar: Love and Money Quiz

As part of her new financial education curriculum Your Money Revolution, financial security expert Pamela Yellen has created a Love and Money Quiz to help couples jump-start their conversations about money. Couples are encouraged to take the quiz separately and then compare their answers, keeping in mind there are no right or wrong answers. Here are a few sample questions:

If I won $10,000 on a scratch-off lottery ticket, I would:

Drop everything and call my partner to share the good news — and, of course, the money

Share the winnings with my partner and extended family, but dictate priorities for using the funds

Set aside a portion of the winnings exclusively for myself, and share the rest with my spouse and family

Keep my good fortune a complete secret and save the money for any future “no-questions-asked” use as I desire

Other

Carrying a debt load:

Is okay if you can keep up with the payments

Is common practice. Everybody does it and it keeps the economy running

Makes me crazy and causes me to lose sleep at night

Is never okay. Don’t buy it if you can’t pay for it

Other

Among my money assumptions, I assume:

As a parent, I am responsible for my children’s college educations

When my parents become elderly, I will need to help them out financially

Whoever earns the most money in the household should have the most say over how it is used

No matter who earns the most, we share money and decision-making equally

Money given to me by my family will remain mine alone

All money that comes in will be shared with my partner, no matter what the source